Paperwork, and more paperwork–Discovery in the construction lawsuit (Law & Order: Hard Hat files Part 4)

As I mentioned at the start of this series, one of the reasons that I like watching Law & Order is that things happen fast, and there is always a smoking gun paper to be found by the lawyers over a night of eating cold Chinese food. Yes, well- about that. In the construction world -not so much.

Depending on the size of the project, there may be massive amounts of paperwork involved. Think about every email, of every employee who touched the project, from initial proposal through final punch list. Add in the change order logs, pay applications (with backup), submittals, shop drawings, project correspondence, drawings, specifications, diaries, meeting minutes, daily reports, site inspections, etc—and you can begin to visualize the problems that the magnitude of documentation creates. Naturally, in the age of electronic data, digital cameras, and cloud computers, the issue of quantity is even more magnified.

Now, let’s discuss the discovery process in a construction lawsuit—that is, what the other side can ask for, what you must give, and how the process works. Then I’ll detail a few recommended practices to put your firm in the best position possible if and when it has to deal with the information overload of a construction lawsuit.

What is “discovery” in the legal world?

Discovery is the all-encompassing term for means and methods to get information necessary to prosecute or defend a lawsuit. The main written discovery consists of interrogatories and requests for production of documents. Interrogatories are written questions that you (with the help of your lawyer) must answer about the project. Requests for production, on the other hand, are requests made for documents that may, or may not, be relevant or admissible. Inevitably, in one form or another, your entire project files need will likely need to be produced to the other side.

Be aware: things that you may not consider part of your firm’s project files may still be demanded.

Does anyone at your company keep an old-fashioned pocket calendar, filled with a mixture of both business items and personal information? It can be demanded in the discovery process.

Does your company conduct internal post-mortem meetings to discuss ways to improve on future problems and what went wrong on this one? Discoverable.

Does one of your employees have a personal relationship with an employee of the general contractor, such that they send good-natured barbs and sarcastic comments about the project or project personnel to one another? Yep- you guessed it—discoverable.

Each and every document, paper, back of envelope note, or personal diary entry can be demanded. Scary prospect, right?

What can you do to limit the embarrassment and lessen the pain?

To lessen the pain, be sure to adopt some best management project and personnel practices, including:

Consistent intake methods. Every employee who brings in work should know to find, modify, and use the Firm’s contract and/or form proposals. Educate both your employees and your clients on the importance of having good, written contracts and proposals, and procure them in a uniform and systematic way. There should also be a follow up procedure in place, in case a signed contract or proposal is not obtained. One suggestion I have made previously: do not open a new client or matter number to bill against until the contract is in place.

Management of rogue employees. Ideally, don’t let any employees only use their hard drive. If you can’t achieve that level of cooperation, at least insist that documents be copied over to the Firm’s computer system on a regular basis, and at least weekly.

Decide on Firm-wide file management. Everyone on your staff should be filing everything the same way, whether in paper records or in email folders. As noted in my post on how to smartly handle project documents, all communications should be in one place, preferably in a chronological order. Failing that, a master chronological file could be kept for future reference. You also must decide whether and which emails need to be printed and/or saved, and institute a standard policy Firm-wide for those as well.

Create a Problem file(s). If problems in certain areas arise, maintain a separate file and/or e-folder for all documents relating to that area. Who knows, one of those may end up being the smoking gun that makes your case.

Use a separate Legal file, if necessary. Related to the problem file, if you get any legal help or help from your insurance company, create a new “Legal” file for legal issues, communications, and the like. Do NOT keep this file with the other project files. Ideally, all legal files should be kept in a different location/drawer/desk/office to prevent inadvertent disclosure in a lawsuit.

And, the #1 Rule relating to document best practices?

Follow the Grandma/Newspaper rule. That is, instruct your employees to be careful in what they say in any forum– website, newsgroup, email, etc. Before sending off any questionable communications, each employee should ask himself:

How would my grandma feel if she read my message in the newspaper?

If he feels comfortable that the message wouldn’t make Grandma hold her head in shame, then and only then should he press “send”.

While you don’t need to know all the details of how to answer discovery unless and until you’ve been sued, if you follow these document best practices, you will be far ahead of the curve should you have to defend yourself in court.

Questions, comments, observations? Share in the comments below or shoot me an email.

Next in our series: Being deposed—not just for dictators! Depositions in the construction lawsuit